The Problem with Titles

This will no doubt be a controversial post, and it’s more of a rant than I usually write. I’ll also admit up front that I always try to present solutions alongside problems…but this is one problem that doesn’t have an obvious and practical solution.  I hate titles. My old boss from years ago at MovieFone used to say that nothing good could come from either Titles or Org Charts – both were “the gift that keeps on giving…and not in a good way.”

I hate titles because they are impossible to get right and frequently cause trouble inside a company. Here are some of the typical problems caused by titles:

• External-facing people may benefit from a Big Title when dealing with clients or the outside world in general. I was struck at MovieFone that people at Hollywood studios had titles like Chairman of Marketing (really?), but that creates inequity inside a company or rampant title inflation
• Different managers and different departments, and quite frankly, different professions, can have different standards and scales for titles that are hard to reconcile.  Is a Controller a VP or a Senior Director?  And does it really matter?
• Some employees care about titles more than others and either ask or demand title changes that others don’t care about.  Titles are easy (free) to give, so organizations frequently hand out big titles that create internal strife or envy or lead to title inflation
• Titles don’t always align with comp, especially across departments. Would you rather be a director making $X, or a senior manager making $X+10?
• Merger integrations often focus on titles as a way of placating people or sending a signal to “the other side” — but the title lasts forever, where the need that a big title is fulfilling is more likely short term
• Internal equity of titles but an external mismatch can cause a lot of heartache both in hiring and in noting who is in a management role
• Promotions as a concept associated with titles are challenging.  Promotions should be about responsibility, ownership and commensurate compensation.  Titles are inappropriately used as a promotion indicator because it inherently makes other people feel like they have been demoted when keeping the same title
• Why do heads of finance carry a C-level title but heads of sales usually carry an EVP or SVP title, with usually more people and at least equal responsibility?  And does it sound silly when everyone senior has a C level title?  What about C-levels who don’t report to the CEO or aren’t even on the executive team?
• Ever try to recalibrate titles, or move even a single title, downward?  Good luck

What good comes from titles?  People who have external-facing roles can get a boost from a big title. Titles may be helpful to people when they go look for a new job, and while you can argue that it’s not your organization’s job to help your people find their next job, you also have to acknowledge that your company isn’t the only company in the world.

Titles are also about role clarity and who does what and what you can expect from someone in a department.  You can do that with a job description and certainly within an organization, it is easy to learn these things through course of business after you join.  But especially when an organization gets big, it can serve more of a purpose.  I suppose titles also signal how senior a person is in an organization, as do org charts, but those feel more like useful tools for new employees to understand a company’s structure or roles than something that all employees need every day.

Could the world function without titles?  Or could a single organization do well without titles, in a world where everyone else has titles? There are some companies that don’t have titles. One, Morning Star, was profiled in a Harvard Business Review article, and I’ve spoken to the people there a bit. They acknowledge that lack of titles makes it a little hard to hire in from the outside, but that they train the recruiters they work with how to do without titles – noting that comp ranges for new positions, as well as really solid job descriptions, help.

All thoughts are welcome on this topic.  I’m not sure there’s a good answer.  And for Return Pathers reading this, it’s just a think piece, not a trial balloon or proposal, and it wasn’t prompted by any single act or person, just an accumulation of thoughts over the years.

Almost a year into my second journey as a startup CEO at Bolster, and I’m getting more and more questions from other CEOs about what it’s like doing a second startup after almost 20 years at the first one…and achieving pretty good scale by the end.  The short answer is, it’s the same, only it’s way better.  Here’s why.

I’m more confident.  So is our whole founding team.  When Jack and I started Return Path, we were 29.  This time, we were 49 — and the average age of the founders was probably 46 or 47.  The bottom line is that we don’t know everything about the business we’re building, but we know what we’re doing in terms of building a business, a startup, a software company, a service-oriented business, leading a team, planning, executing, and on and on.  Confidence in all of those areas means large portions of our day and brain space are freed up to focus on the actual construction of the business without worrying if we’re doing things right or wrong.

It’s much easier to build a startup today.  1999 wasn’t the dark ages, but it feels like a different millennium in terms of what it’s like to start a technology company from scratch.  The cloud and micro services/APIs mean that we are able to build our platform much more quickly at much lower cost than in the past.  And in terms of tooling the business, we got up and running with about 20 different DIY cloud/SaaS solutions in about 6 weeks for a cost of less than $10k/year.

We are sharper on execution and impatient for success.  Your first startup in your 20s is a lot about “enjoying the startup journey.”  This time around, our team is significantly more focused on critical stage-gate success metrics.  In both cases of course, the objective was to win, but this time around, we are much more focused on getting to that point sooner and with less waste.

We are a lot more productive.  Ok, fine, we’re cheating because of COVID and working from home.  No train commutes.  No plane trips.  No water cooler chatter.  No fluff.  It’s not sustainable, and I’ll write about that more in a future post.  But it’s leading to a surge of productivity like I’ve never experienced or seen before in my career.  I do like to think at least some of it comes from professional maturity — we’ll see when life returns to something more closely approximating normal.

I am having a blast being on the front lines.  I went from running a 500-person company, where I’d honed my job and skill set around communication, people issues, and mobilizing the army to go do things…to spending less than 5% of my time running the company and managing people.  Now depending on the moment, I’m an SDR, a customer success manager, a product manager, and a marketing copywriter.  And probably some other things, too.  And I love every minute of it.  It’s a lot more fun to see the direct impact of my actions on the business as opposed to only really seeing the direct impact of my actions on the people in the business (and occasionally then on some aspect of the business as an individual contributor).

Maybe I’m not having a typical second startup experience.  I know some friends who had successful first exits and hated going back to square one, or failed at a second business and were really disappointed about it, only to shift careers.  But my experience so far is a much better second verse, even though it’s a bit like the first.

Not Just About Us

When we updated our values this year, we felt there were a couple critical business elements missing from this otherwise “how” series of statements.  One thing missing was our clients and users!  So we added this value to our list:

Not Just About Us:  We know we’re successful when our clients are successful and our users are happy.

This may be one of the most straightforward statements of all our values, so this will be a short post.  We serve lots of constituencies at Return Path.  And we always talk about how we’re a “People First” organization and what that means.  I suppose that inherently means we are a “Client Second” organization, though I’m not sure we’d ever come out and say that.  We do believe that by being People First, we will ultimately do the best job for our customers. 

 That said, we aren’t in business just to build a great company or to have an impact on our community.  Or even our shareholders.  We are also in it for our customers.  Whether we are producing a product for mailers, for ESPs, for ISPs, for security companies, for agencies, or for end users, we can’t forget that as an important element of our success every day.

Management by Chameleon

When I first became a manager, back in the MovieFone days, I had the good fortune to have an extreme case of “first time manager”– I went from managing nobody to managing 1 person to managing something like 20 people inside 6 months.  As a result, I feel like I learned a couple lessons more quickly than I might otherwise have learned them.  One was around micromanagement and delegation.  When I went from 0 to 1 direct report, I micromanaged (I still feel bad about that, Alissa).  But when I went from 1 to 20, I just couldn’t micromanage any more, and I couldn’t do it all myself.  I had to learn how to delegate, though I’m sure I was clumsy at it at first.

The larger lesson I learned when I went from 1 direct report to 5 (each of whom had a team underneath her) is that different people and different teams require different management styles and approaches.  This is what I call management by chameleon.  As a chameleon has the same body but shows it differently as situations warrant, you can have a consistent management philosophy but show it differently when you are with different direct reports or teams.

On my original team at MovieFone, I had one person who was incredibly quantitative and detail/process oriented and who indirectly managed a lot of products and processes outside our group.  I had another who was a complete newbie to the company and to an operating role (she was a former management consultant) with a large number of entry level employees in the field.  I had another who was an insanely creative insomniac trying to blaze new trails and create editorial content inside a technology company.  A fourth was a very broad thinking generalist, one of those great corporate athletes, who managed whatever fell between the cracks.  And the last was a commercial banker turning herself into a relationship management specialist working with an unorthodox business model and partners who half the time felt threatened by us.

In short, I had five incredibly different people to manage with five incredibly different functions and team types/employees under them.

And I learned over time — I like to think I learned it in a hurry, but I’m sure it took a couple of years, and I’m probably still working on it — that trying to manage those people and the second-level identically was counterproductive.  A small example:  8 a.m. meetings for the insomniac never worked well.  A bigger example:  diving into strategic topics with the former consultant who just joined the team and had never managed anyone before was a little bit of focusing on the forest and forgetting about the trees.

At the end of the day, you are who you are as a manager.  You are hard-charging, you are great at developing individuals, you seek consensus.  But how you show these traits to your team, and how you get your team to do the work you need them to do, can differ greatly person by person.

What a View, Part III

We are in the middle of our not-quite-annual senior team 360 review process this week at Return Path.  It’s particularly grueling for me and Angela, our SVP of People, to sit in, facilitate, and participate in 15 of them in such a short period of time, but boy is it worth it!  I’ve written about this process before — here are two of the main posts (overall process, process for my review in particular, and a later year’s update on a process change and unintended consequences of that process change). I’ve also posted my development plans publicly, which I’ll do next month when I finalize it.

This year, I’ve noticed two consistent themes in my direct reports’ review sessions (we do the live 360 format for any VP, not just people who report directly to me), which I think both speak very well of our team overall, and the culture we have here at Return Path.

First, almost every review of an executive had multiple people saying the phrase, “Person X is not your typical head of X department, she really is as much of a general business person and great business partner and leader as she is a great head of X.”  To me, that’s the hallmark of a great executive team.  You want people who are functional experts, but you also need to field the best overall team and a team that puts the business first with understandings of people, the market, internal dependencies, and the broader implications of any and all decisions.  Go Team!

Second, almost every review featured one or more of my staff member’s direct reports saying something like “Maybe this should be in my own development plan, but…”  This mentality of “It’s not you, it’s me,” or in the language of Jim Collins, looking into the mirror and not out the window to solve a problem, is a great part of any company’s operating system.  Love that as well.

Ok.  Ten down, five to go.  Off to the next one…

The iPad’s Limitations as a Business Device

I love my iPad.  Let me just start with that.  I’ve found lots of use cases for it, and it’s very useful here and there for work.  But I’ve seen a bunch of people trying to use it as a primary business device, which I can’t quite figure out.  Here are the things that prevent me from making it my main business device:

• lack of keyboard (can mitigate with the keyboard dock, which I have)
• lack of mouse (not a killer limitation, just takes some getting used to, also the arrows on the keyboard dock help)
• lack of connection to files and true Office compatibility (this can largely be mitigated through a combination of the Dropbox or Box.net app and the QuickOffice app)
• lack of multitasking (this is the main killer)

Much of the time, I need to be rapidly switching between and simultaneously using email, the web, and multiple Office documents.  Having to basically shut down each one and then fire up another instead of having them all up at once on multiple monitors or at least easily accessible via alt-tab is a big pain, especially when trying to cut and paste things from one to another.   The iPad is awesome for many many things, and for limited work usage (other than complex spreadsheets), it works “well enough.”  But I would find it difficult to make it my primary business machine other than for a fairly short (1 day) business trip.

Keeping Commitments

Today’s post is another in the series about our 13 core values at Return Path, about making commitments.  The language of our value specifically is:

We believe in keeping the commitments we make, and we communicate obsessively when we can’t

Making and keeping commitments is not a new value – it’s one of Covey’s core principles if nothing else.  I’m sure it has deeper roots throughout the history of mankind.  But for us, this is one of those things that is hard wired into the social contract of working here.  The value is more complicated than some of the other ones we have, and although it is short, it has three components that worth breaking down:

• Making commitments:  Goal setting, whether big company-wide goals, or smaller “I’ll have it to you by Tuesday” goals, is the foundation for a well-run, aligned, and fast-paced organization
  
• Keeping commitments:  If you can’t keep the overwhelming majority of your commitments, you erode the trust of your clients or colleagues and ultimately are unable to succeed
  
• Communicating when commitments can’t be met:  Nobody is perfect.  Sometimes circumstances change, and sometimes external dependencies prevent meeting a goal.  The prior two parts of this value statement are, in my mind, pay to play.  What separates the good from the great is this third piece — owning up loud and clear when you’re in danger of blowing a goal so that those who are counting on you know how to reset their own work and expectations accordingly
  

It’s worth noting on this one that the goal is as relevant EXTERNALLY as it is INTERNALLY.  Internal commitments are key around building an organization that knows how to collaborate and hand work off from group to group.  External commitments — from meeting investor expectations to client deliverables — keep the wheels of commerce flowing.

I’m enjoying articulating these values and hope they’re helpful for both my Return Path audience and my much larger non-Return Path audience.  More to come over time.

Why We Occasionally Celebrate International Talk Like a Pirate Day

No kidding – next Monday is September 19, and that is, among other things, International Talk Like a Pirate Day. We’ve done a variety of things to celebrate it over the years, not the least of which was a series of appropriately-themed singing telegrams we sent to interrupt all-hands meetings.  I can’t remember why we ever started this particular thing, but it’s one of many for us.  Why do we care?  Because

We are serious and passionate about our job and positive and light-hearted about our day

This is another one of Return Path’s philosophies I’m documenting in my series on our 13 core values.

I’m not sure I’d describe our work environment as a classic work hard/play hard environment. We’re not an investment bank. We don’t have all 20something employees in New York City. We’re not a homogeneous workforce with all of the same outside interests. So while we do work hard and care a lot about our company’s success, our community of fellow employees, solving our clients’ problems, and making a big impact on our industry and on end users’ lives, we also recognize that “playing hard” for us means having fun on the job.

It’s not as if we run an improv comedy troop in the lunch room or play incessant practical jokes on each other (though I have pulled off a couple sweet April Fool’s pranks over the years). But as the value is worded, we try to set a lighthearted and positive atmosphere. This one is a little harder to produce concrete examples of than some of our other core values that I’ve written up, but that doesn’t mean it’s any less important.

Whether it’s talking like a pirate, paying quiet homage to our unofficial mascot – the monkey, stopping for a few minutes to play a game of ping pong, or just making a silly face or poking fun of a close colleague in a meeting, I’m so happy that our company and Board have this value hard-wired in.  Life’s just too short not to have fun at every available opportunity!

Job 1

The first “new” post in my series of posts about Return Path’s 14 Core Values is, fittingly,

Job 1:  We are all responsible for championing and extending our unique culture as a competitive advantage.

The single most frequently asked question I have gotten internally over the last few years since we grew quickly from 100 employees to 350 has been some variant of “Are you worried about our ability to scale our culture as we hire in so many new people?”  This value is the answer to that question, though the short answer is “no.”

I am not solely responsible for our culture at Return Path. I’m not sure I ever was, even when we were small.  Neither is Angela, our SVP of People.  That said, it was certainly true that I was the main architect and driver of our culture in the really early years of the company’s life.  And I’d add that even up to an employee base of about 100 people, I and a small group of senior or tenured people really shouldered most of the burden of defining and driving and enforcing our culture and values.

But as the business has grown, the amount of responsibility that I and those few others have for the culture has shrunk as a percentage of the total.  It had to, by definition.  And that’s the place where cultures either scale or fall apart.  Companies who are completely dependent on their founder or a small group of old-timers to drive their cultures can’t possibly scale their cultures as their businesses grow.  Five people can be hands on with 100.  Five people can’t be hands on with 500.  The way we’ve been able to scale is that everyone at the company has taken up the mantle of protecting, defending, championing, and extending the culture.  Now we all train new employees in “The RP Way.”  We all call each other out when we fail to live up to our values.  And the result is that we have done a great job of scaling our culture with our business.

I’d also note that there are elements of our culture which have changed or evolved over the last few years as we’ve grown.  That isn’t a bad thing, as I tell old-timers all the time.  If our products stayed the same, we’d be dead in the market.  If our messaging stayed the same, we’d never sell to a new cohort of clients.  If our values stayed the same, we’d be out of step with our own reality.

Finally, this value also folds in another important concept, which is Culture as Competitive Advantage.  In an intellectual capital business like ours (or any on the internet), your business is only as good as your people.  We believe that a great culture brings in the best people, fosters an environment where they can work at the top of their games even as they grow and broaden their skills, increases the productivity and creativity of the organization’s output through high levels of collaboration, and therefore drives the best performance on a sustained basis.  This doesn’t have to be Return Path’s culture or mean that you have to live by our values.  This could be your culture and your values.  You just have to believe that those things drive your success.

Not a believer yet?  Last year, we had voluntary turnover of less than 1%.  We promoted or gave new assignments to 15% of our employees.  And almost 50% of our new hires were referred by existing employees.  Those are some very, very healthy employee metrics that lead directly to competitive advantage.  As does our really exciting announcement last week of being #11 in the mid-sized company on Fortune Magazine’s list of the best companies to work for.

B+ for Effort?

Effort is important in life.  If Woody Allen is right, and 80% of success in life is just showing up, then perhaps 89% is in showing up AND putting in good effort.  But there is no A for Effort in a fast-paced work environment.  The best you can get without demonstrating results is a B+.

The converse is also true, that the best you can get with good results AND without good effort is a B+.

Now, a B+ isn’t a bad grade either way.  But it’s not the best grade.  In continuing with this series of our 13 core values at Return Path, the next one I’ll cover is:

We believe that results and effort are both critical components of execution

We’ve always espoused the general philosophy that HOW you get something done is quite important.  For example, if the effort is poor and you get to the right place, maybe you got lucky.  Or even worse, maybe you wasted a lot of time to get there.  Or if you burned your colleagues or clients in the process of getting to the right place, a positive short-term result can have negative long-term consequences.

But when all is said and done, even with the most supportive culture that values effort and learning a lot (more on that in the next post in this series), results speak very loudly. Customers don’t give you a lot of credit for trying hard if you’re not effectively delivering product or solving their problems.  And investors ultimately demand results.

Our “talent development” framework at Return Path – the thing that we use to measure employee performance, reflects this dual view of execution:

The X axis is clearly labeled “Performance,” meaning results, and the Y axis is labeled “Potential – RP Expectations,” which basically means effort and fit with the culture at Return Path.  We plot out employees on the basis of their quantitative scores coming out of their performance reviews on this grid every year.  Which box any given employee falls in has a lot to do with how that employee is managed and coached in the coming months.  We’re always trying to move people up and to the right!

The definitions of the different boxes in this framework are telling and speak to the subject of this post.  To be an A player here, you have to excel in both effort and results – that’s our definition of successful execution.

Happy Thanksgiving, everyone!  We’re getting to the end of this series…only two more to go.

Peter Principle, Applied to Management

My Management by Chameleon Post from a couple weeks ago generated more comments than usual, and an entertaining email thread among my friends and former staff from MovieFone.  One comment that came off-blog is worth summarizing and addressing:

There are those of us who should not manage, whose personalities don’t work in a management context, and there is nothing wrong with not managing.  Also, there promotion to management by merit has always been a curiosity to me. If I am good at my job, why does it mean that I would be good at managing people who do my job? In other words, a good ‘line worker’ doth not a good manager make. I’d prefer to see people adept at being team leads be hired in, to manage, then promotion of someone ill-fitted for such a position be appointed from within. This latter happens far to often, to the detriment of many teams and companies.

For those of you not familiar with the Peter Principle, the Wikipedia definition is useful, but the short of it is that “people are promoted to their level of incompetence, when they stop getting promoted…so in time, every post tends to be occupied by an employee who is incompetent to carry out their duties.”

Back when I worked in management consulting, I always used to wonder how it was that all the senior people spent all their time selling business.  They hadn’t been trained to sell business.  And a lot of the people great at executing complex analysis and client cases hated selling. Or look at the challenge the other way around:  should a company take its best sales people and turn them into sales managers?

We’ve had numerous examples over the years at Return Path of people who are great at their jobs but make terrible, or at least less great, managers.  The problem with promoting someone into a management role mistakenly isn’t only that you’re taking one of your best producers off “the line.”  The problem is that those roles are coveted because they almost always come with higher comp and more status; and if a promotion backfires, it generally (though not always) dooms the employment relationship.  People don’t like admitting failure, people don’t like “moving backward,” and comp is almost always an issue.

What can be done about this?  We have tried over the years to create a culture where being a senior individual contributor can be just as challenging, fun, rewarding, impactful, and well compensated as being a manager, including getting promotions of a different sort.  But there are limits to this.  One obvious one is at the highest levels of an organization, there can only be one or two people like this (at most) by definition.  A CEO can only have so many direct reports.  But another limit is societal. Most OTHER companies define success as span of control.  You get a funny look if you apply for a job with 15 years of experience and a $100k+ salary yet have never managed anyone before.  After all, the conventional wisdom mistakenly goes, how can you have a big impact on the business if all you do is your own work?

The fact is that management is a different skill.  It needs to be learned, studied, practiced, and reviewed as much as any other line of work.  In most ways, it’s even more critical to have competent and superstar managers, since they impact others all day long.  Obviously, people can be grown or trained into being managers, but the principle of my commenter – and “Peter” – is spot on:  just because you are good at one job doesn’t mean you should be promoted to the next one.

I’m not sure there’s a good answer to this challenge, but I welcome any thoughts on it here.